China seen as likely buyer of secret car technology

Government fears leak of Renault's secrets may represent a serious threat to French economic interests. John Lichfield reports

China is the likely destination of the industrial secrets stolen from the car giant Renault which reveal work on a new, high-performance generation of electric cars, officials fear.

The French equivalent of MI5 has been asked to investigate the suspected leak of unpatented secrets which led to the suspension of three very senior Renault executives on Wednesday. The fact that China may have instigated the leak explains why France is treating the incident as not simply industrial espionage but a serious threat to national, and European, strategic economic interests. A government minister spoke on Thursday of "economic warfare".

China is already one of the greatest rivals to Renault's plans to dominate a potentially vast world market in electric cars by the end of this decade. The secrets, believed to have been shipped to China via a French-based operation specialising in economic spying, cover new engines and, crucially, a new generation of long-lasting batteries for cars which will reach the market in about 2012-13.

Renault officials and sources in the French security services told the newspaper Le Figaro yesterday that "Chinese interests" were suspected to have been behind the alleged theft. A government politician who specialises in economic intelligence, Bernard Carayon, confirmed this report. "Suspicions do indeed point in that direction," he said.

Mr Carayon, a member of parliament for the ruling Union Pour un Mouvement Populaire (UMP), who has written several studies on industrial espionage, said Renault should be held partly to blame for failing to ask the security services to help protect such crucial secrets.

"This affair was only possible because of an absence of sufficient preventative measures," he said. "It is astonishing that a company as large as Renault did not approach the Direction Centrale du Renseignement Intérieur (DCRI), whose competence in this area is well-known."

Government sources said yesterday that the DCRI, broadly equivalent to MI5 in Britain, had been asked to investigate the leak by the president's office.

Renault and its Japanese subsidiary, Nissan, has invested more than €4bn (£3.4bn) in developing new all-electric cars to match the price and performance of internal-combustion vehicles. Several models were unveiled last year but the leaks are said to concern a new generation of vehicles expected to enter the market in two or three years' time.

According to Le Figaro, they included unpatented advances in electric car engines and batteries. Battery technology is the key to a viable future for electric cars. Existing models are limited to a range of about 100 miles before they have to recharge.

China has a number of reasons for taking an interest in electric car technology. Its cities are suffocated by car emissions. Stealing a march in electric technology would help the Chinese car industry to close the gap on its European, Japanese and American rivals. China also has the second largest international deposits of lithium, which is a key component in powerful, long-life batteries.

The three senior Renault executive suspended on Thursday have been named in the French press. They include Jean-Michel Balthazrad, head of the company's "forward planning and projects" division. The others are said to be his deputy, Bertrand Rochette, and the director of the electric vehicle programme, Matthieu Tennenbaum.

Their suspension follows an eight month internal investigation. According to Le Figaro, information was passed to one or more French-based agencies, which specialise in economic intelligence. The documents are then believed to have been sold to China. Although nothing has yet been proved against the suspended men, Renault staff are said to have been stunned that such senior executive should be suspected of leaking the company's most vital secrets.

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